Google Stock Suffers Worst Crash in 22 Years. What Happened?

Alphabet shares fell nearly 12% early Thursday, on track for their worst post-earnings drop on record. Google’s AI search is drawing more users but less ad money.

The slide erased roughly $465 billion in market value, more than three times Alphabet’s $127.6 billion quarterly revenue.

Google Search is Not Bringing Profits

Search revenue rose 12% to $63.35 billion in the third quarter, down from 17% in the second. Analysts expected about 15%.

Chief Executive Sundar Pichai said query growth hit its fastest pace in five years. Yet Chief Business Officer Philipp Schindler named weaker earnings from AI Mode as one cause of the slowdown, Search Engine Journal reported.

AI Mode is Google’s chatbot-style search, which answers in conversation. Each AI Mode search currently brings in less ad money than a classic one, and Google is still testing ads inside it.

Alphabet $GOOGL -13%, on track for its WORST post-earnings decline on record:As fears over the future of Google Search intensify despite Cloud revenue more than doubling.Search revenue growth slowed to 12% in Q3 from 17% in Q2, missing expectations of roughly 15%.The… https://t.co/i72K1zYzoN pic.twitter.com/EQnGgwC12f

— Wall St Engine (@wallstengine) October 29, 2026

Spending adds pressure. Free cash flow, the cash left after investment, hit minus $9.1 billion, as BeInCrypto reported in its first-night earnings coverage.

“In a market worried about AI cannibalising the franchise, investors need to see search accelerating, not decelerating,” Reuters reported, citing Dave Wagner, portfolio manager at Aptus Capital Advisors.

Does Wall Street Still Back Alphabet After the Drop?

Shares also fell 7.1% after July’s results. On Tuesday, BeInCrypto’s pre-earnings chart analysis flagged $306 and then $275 as downside levels. Thursday’s drop broke the first.

“…on track for its WORST post-earnings decline on record: As fears over the future of Google Search intensify despite Cloud revenue more than doubling. Search revenue growth slowed to 12% in Q3 from 17% in Q2, missing expectations of roughly 15%,” noted Bull Theory, a popular account on X.

Meanwhile, Google Cloud revenue rose 103% to $30.7 billion, with $561 billion in signed contracts not yet billed. Rosenblatt analyst Scott Devitt projects Cloud will out-earn Search and YouTube ads combined by 2028.

Despite Google’s stock crash deepening, analysts remain optimistic. Of 29 analysts tracked by TipRanks, 25 rate the stock a buy, with an average target of $398.50.

Notably, most of these targets predate the report. The next test is whether AI Mode ads, now expanding to 10 more markets, close the gap.